Charming Charlie

Despite what its name suggests, the growth of charming CHARLIE is not attributable only to natural amiability. Rather, the success of this fast-growing fashion accessories retailer has been hard-won through a combination of business acumen and fortunate timing. These factors have carried the young company through the worst economy in decades.

“We have worked very hard,” insists Steve Lovell, who became president of the company in 2006, just two years after its founding. “We spent the first couple of years trying to get our playbook correct and coincidentally, post-Lehman, the real estate market really opened up and we had the ability to do a lot that we couldn’t have done before that. There were real estate opportunities to take advantage of. We had already hired people and positioned ourselves for growth, so it was a nice coinciding of time.”

When Lovell joined the company, charming CHARLIE’s locations were all based in Houston. By February 2012, the fashion accessories retailer operated 178 stores across 33 states. By the end of this year, it will be present in three more states: Rhode Island, Oregon and Iowa. It is also fine-tuning an e-commerce system that had a soft launch in November.

Confidence-Building

When the real estate market became a buyer’s world, the company opened seven more Houston stores, solidifying its local standing. After successfully pulling off the mini-expansion, the team decided to take a more regional approach and launched stores in Austin, Dallas and San Antonio, Texas. The next step was to clone the model, but to pull it off, the executive team sought out a Houston-esque market. Phoenix was suggested, but at the time, its economy was considerably more dubious than some others.

Instead, Atlanta became the focus and when that move proved successful, “it gave us the confidence to open in other southeastern states,” Lovell explains. “We opened seven stores [in Atlanta] and then 30 other stores mainly in the Southeast. The next year we opened 60 stores and that took us into more of the Southeast and the Midwest. Then last year, we opened 82 stores and expanded into California and the Northeast.”

But this is not simply an “if you build it” success-story. The jewelry, handbags, purses, scarves, shoes and other adornments that fill each location appeal to a broad range of shoppers in the most coveted consumer group: women. “Our target is [ages] 25 to 40,” Lovell says. “But we appeal from age seven to 70 depending on the store. In South Florida, we have more mature customers who love us. In malls, there’s a little bit of a younger demographic. But we appeal to everyone. We get mother-daughter and mother-daughter-granddaughter shopping groups. Customers tell us is it’s a great experience that they can shop with their kids and granddaughters.”

Frugal Fashion Forward

For the past few years, the media have said and shoppers have confirmed that frugal is the new chic. The expansion of charming CHARLIE banked on the premise that its target market was still buying despite a down economy. With a price range between $5 and $50 – with very little merchandise above that peak – charming CHARLIE made staying on top of fashion feasible. “There is still a desire to shop,” Lovell explains. “Our store is retail therapy because it’s tough to buy a new outfit, but you could create a new outfit with accessories.” In the same way that consumers began to favor home renovations versus purchasing a new house, accessories have filled in a necessary gap in the fashion realm, and no one quite fills in that gap like charming CHARLIE.

With stores that average 8,000 square feet and are filled with approximately 45,000 fashion items, Lovell explains that charming CHARLIE has taken the boutique concept to a larger scale. It competes with smaller local retailers as well as accessory divisions in department stores, but there is no single retailer competing with charming CHARLIE on a national scale. It does sell clothing, but in limited quantities as its goal is to be the premier fashion jewelry and accessories retailer. Because it is not in major competition with traditional fashion clothing stores but instead complements those brands, several landlords have adopted charming CHARLIE as a darling tenant.

The store’s merchandise is organized into color families, and styles from vintage to modern and bohemian to sophisticated abound. Accessories are displayed on built-in wall shelving and placed on large circular tables throughout the store, which makes what could be an otherwise overwhelming experience into an easy shopping excursion. Comments on charming CHARLIE’s Facebook page show that the approach is paying off. One Phoenix shopper gushes that it “makes me feel like a kid at a candy store.” Another customer, after purchasing a ring, two necklaces and a hat, shared her fear via Facebook of having a “charming CHARLIE withdrawal” when she goes on vacation.

The affection for charming CHARLIE expressed on the internet is reflected inside the actual stores. Lovell explains the cell phone effect. “Our store experience is very unique,” he says. “Oftentimes when a new customer comes in, they will spend three or four minutes looking around and then will call their girlfriend and say, ‘Oh, my goodness, you have to meet me here, you won’t believe what I found.’”

Charming the Industry

The customers are undoubtedly the enablers of charming CHARLIE’s success, but they are far from the only group to recognize the company’s value. The company began its expansion in 2008, and in 2010, industry groups really began to take notice, giving the company something of a coming-out party and celebrating its promising success despite a notoriously fickle fashion world.

In 2010, The International Council of Shopping Centers (ICSC) named charming CHARLIE as one of the six “Hot Retailers” of the year.

ICSC’s president and CEO Michael P. Kerchavel explained that the winners chosen by the council “create exciting and interesting shopping experiences that contribute to the success of the shopping centers that have them as tenants.”

That same year, Ernst & Young LLP named charming CHARLIE founder and CEO Charles Chanaratsopon one of the Entrepreneurs of the Year for the Houston and Gulf Coast area. Also in 2010, it placed No. 656 on Inc. magazine’s list of top 5,000 fastest-growing businesses. Broken down into subcategories, charming CHARLIE ranked No. 29 in the retail category and No. 13 in Houston. Adding to its award sweep of 2010, the American Marketing Association named it “Marketer of the Year” in the retail category.

As the company continues on a fast and steady ascent, Lovell explains the crucial contributor to growth is piecing together the right team to manage it. In the last 12 to 18 months, the company has attracted and recruited a number of proven professionals, including a chief financial officer, chief information officer and chief merchandising officer.

“As we grow, the No. 1 challenge is always finding the right people,” Lovell says. “As the company grows, the supply chain changes, people change, prices change and the infrastructure changes. You are doing these things at the same time and you have to build the right team to overcome those challenges associated with growth. Our mantra is ‘we build it ahead of time.’ Today, we have an organization that will get us to 500 stores. It’s easier to build the team now while you’re smaller and manage the growth into the future.”